The euro stood at $1.2767 after bouncing off a 16-month trough at $1.2666. Traders said buying ahead of a $1.2650 option barrier had prompted some short covering.
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Tuesday, January 10, 2012
(Reuters) - Hedge funds are taking on the powerful International Monetary Fund over its plan to slash Greece's towering debt burden as time runs out on the talks that could sway the future of Europe's single currency.
The euro stood at $1.2747, down 0.2 percent from late U.S. trade on Tuesday, having bounced off a 16-month trough at $1.2666 set on Monday on trading platform EBS . Resistance is seen at the overnight high around $1.2820, a level representing the 38.2 percent retracement of the Jan. 3 to 9 decline.
Currency volatility is relatively low on the day, with most of the majors vying between losses and gains. The only outstanding gains have been made by commodity currencies – with both the New Zealand and Australian dollars advancing by 0.77% and 0.74% respectively. Economic data seems to be taking a back seat to events in Europe once again, with German Chancellor Merkel meeting with IMF Managing Director Christine Lagarde prior to next week’s Greek debt negotiations.
Ulysses made a pact with his men as they sailed near the Sirens’ rocky island. The Sirens lured sailors to their death through their wondrous singing that caused men to lose all rational thought. Ulysses wanted to hear their song, so he had his men bind him to the mast and he filled their ears with wax. Ulysses knew well that a siren song is truly sweet and hard to resist but, if heeded, eventually will lead to one’s demise. Traders should beware the similar sweet song of unproven profits. It is all too easy even for the astute trader to succumb to empty promises of success while forgetting the shoals brought on by the law of large numbers.
Although the stock market is the first place in which many people think to invest, the U.S. Treasury bond markets arguably have the greatest impact on the economy and are watched the world over. Unfortunately, just because they are influential, doesn’t make them any easier to understand, and they can be downright bewildering to the uninitiated.
"Eurodollar call options" chart shows the price curves for five quarterly sets of call options on Eurodollar futures, beginning at the December 2011 expiration and going through December 2012. The curves include 20 premiums per contract, computed by a regression equation based on five calls for each of the futures.
When MF Global declared bankruptcy on Oct. 31, 2011, it became the eighth largest bankruptcy in U.S. history. Although the bankruptcy left the futures industry with a black eye regarding customer segregated funds, the bankruptcy trustee is working to restore those customer accounts. One aspect that hasn't been addressed much is the actual creditors in the bankruptcy. Here are the top 10 as of Jan. 3, 2012 according to court documents.
Ten of the Fed’s 12 district banks recommended keeping the discount rate unchanged at 0.75%, according to the minutes. Directors from the Boston Fed called for a decrease in the rate to 0.50%, and directors of the Kansas City Fed voted for an increase to 1.00%.
NEW YORK (CNNMoney) -- Orange juice futures surged Tuesday amid fears the U.S. government could ban Brazilian oranges after low levels of fungicide were detected by a juice company.
Jan. 10 (Bloomberg) -- Thomas Jordan’s first test as interim president of Switzerland’s central bank will be to prove he can defend the four-month old cap on the franc as well as its chief architect did.
The eurozone crisis and fears of another recession saw investors ditch equity funds in November at levels not seen since records began in 1992, according to the Investment Management Association (IMA).
Jan. 9 (Bloomberg) -- European Central Bank President Mario Draghi may act more like Ben S. Bernanke than Jean-Claude Trichet in 2012.
With the euro area’s debt crisis pulling its economy into a second recession in three years, Draghi soon may cut the ECB’s benchmark interest rate below 1 percent for the first time and help banks by further inflating its balance sheet, which already has ballooned 17 percent since he took office Nov. 1.
Jan. 9 (Bloomberg) -- The most accurate foreign-exchange forecasters say the euro will depreciate against the dollar for a third straight year, equaling its longest slump since its creation in 1999, as Europe slips into recession.
According to chaos theory, the flap of a butterfly’s wings in Brazil can set off a tornado in Texas. The Tohoku earthquake and tsunami in Japan can hardly be regarded as examples of “the butterfly effect”, where small events can have dramatic and unpredictable consequences; this was no small event. Yet as is ever more apparent, the fallout is being felt in startling ways far beyond the narrow confines of the Japanese economy.
The eurozone debt crisis has started the new year as it no doubt means to go on – with an inconclusive summit, an irrelevant commitment to a financial transactions tax (or Tobin tax), and another bizarrely anomalous event in money markets.
Jan. 10 (Bloomberg) -- The dollar and yen weakened against higher-yielding currencies before Germany’s chancellor meets with the International Monetary Fund’s managing director amid signs European leaders are taking steps to end the debt crisis.
TORONTO—The Canadian dollar was higher Tuesday as sentiment was boosted by the increasing likelihood that France will avoid a credit downgrade from at least one ratings agency.
NEW YORK (Reuters) - Stocks were set to jump at the open on Tuesday after a bullish Alcoa forecast boosted the outlook for the commodities sector and pointed to a stronger global economy.
Jan 10 (Reuters) - European wheat futures edged higher on Tuesday in a last-minute reversal of earlier losses cheered by the rise in crude oil and equities markets and export expectations linked to Algeria's tender to buy milling wheat this week.
Jan. 10 (Bloomberg) -- Commodities rose to near the highest in more than a month after orange juice jumped to the most expensive price in 15 years.
Hildebrand's wife Kashya, a former hedge fund trader who now runs a Zurich art gallery, bought 400,000 Swiss francs ($418,000) worth of dollars on August 15, three weeks before her husband oversaw steps to cap the rise of the safe-haven franc. She later sold the dollars at a higher rate.
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